Cenvat Credit Rules, 2004 – r. 2(l) – Cenvat Credit – Input services – Place of removal – Assessee took credit of input services namely service tax paid on transportation charges upto the place of customers – Admissibility – Held: As per the definition of input service, service used by the manufacturer of clearance of final products ‘from the place of removal’ to the warehouse or customer’s place etc., was exigible for Cenvat Credit – It cannot be said that the outward transportation provided beyond the place of removal is not eligible for input service for availing Cenvat Credit – Once it is accepted that place of removal is the factory premises of the assessee, outward transportation ‘from the said place’ would amount to input service – That place can be warehouse of the manufacturer or it can be customer’s place if from the place of removal the goods are directly dispatched to the place of the customer.
Dismissing the appeals, the Court
HELD: Having regard to the definition of ‘input service’ that was prevailing at the relevant time i.e. prior to April 1, 2008, the submission of the Department that outward transportation engaged for removal of goods from factory to customer premises, cannot be considered as an input service since premises of customer is not recognized as a place of removal under the Central Excise Act, cannot be accepted. As per the said definition, service used by the manufacturer of clearance of final products ‘from the place of removal’ to the warehouse or customer’s place etc., was exigible for Cenvat Credit. The three conditions which were mentioned explaining the ‘place of removal’ are defined in Section
4 of the Act. It is not the case of the Department that the three conditions laid down in the said Circular are not satisfied. If the contention of the Department, is accepted, it would nullify the effect of the word ‘from’ the place of removal appearing in the said definition. Once it is accepted that place of removal is the factory premises of the assessee, outward transportation ‘from the said place’ would clearly amount to input service. That place can be warehouse of the manufacturer or it can be customer’s place if from the place of removal the goods are directly dispatched to the place of the customer. One such outbound transportation from the place of removal gets covered by the definition of input service. [Paras 6-8][439-F-H; 442-C-D]
Commissioner of Central Excise and Service Tax, Bangalore v. ABB Ltd. Vadodara 2011 (23) STR 97 (Kar); Commissioner of Central Excise Belgaum v. M/s. Vasavadatta Cements Ltd.; Gujarat Ambuja Cements Ltd. v. CCE, Ludhiana 2007 (6) STR 249 Tri-D; M/s Ultratech Cements Ltd v. CCE Bhavnagar 2007-TOIL429-CESTAT-AHM – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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